Iraq Seeks $100B Investments To Revive Oil, Transport Sectors

Iraq is looking to attract US$100 billion worth of foreign investment that would help it rebuild its oil refining and petrochemicals sectors and reconstruct crucial infrastructure after it repelled Islamic State out of its territory following a three-year war against the militants.

In December last year, Iraq declared the war with ISIS over and is now seeking foreign investments in major projects that would help it to revive its economy, which has also been hurt by low oil prices.

Ahead of a conference on Iraq’s reconstruction that will be held in Kuwait next week, Iraq’s National Investment Commission published a list of major strategic projects available for investment, with 157 different opportunities up for grabs.

A total of 18 investment opportunities are up on offer in the chemicals, petrochemicals, fertilizers, and refinery sectors.

Iraq—OPEC’s second-largest oil producer behind Saudi Arabia—will be looking to attract investment mostly in the downstream, planning the construction of new refineries with different capacities, including one at the Al-Faw Port with a 300,000-bpd capacity. The other refinery projects are a 150,000-bpd refinery in the Anbar province and a new Al-Nasiriy refinery in Thi Qar province with a production capacity of 150,000 bpd.

Iraq also plans oil storage facilities in the provinces Basra, Mosul, and Saladin.

According to the Kuwait Chamber of Commerce & Industry, Iraq will present at the conference next week feasibility studies for 60 key investment projects with total amount exceeding US$85 billion.

Railways, airports, and ports construction, reconstruction, and rehabilitation are also high on Iraq’s investment opportunities list, including berths for oil products exports and imports at the US$6-billion project for the Grand Port of Al Faw at Basra.

Iraq will probably find investments into the oil industry and agriculture easiest to attract because of its large crude oil reserves and available land and water, Mudhar Saleh, an economic advisor to Iraqi Prime Minister Haider al-Abadi, told Reuters.

Iraq’s oil industry was devastated by three wars between 1979 and 2003 followed by internal strife and now requires billions of dollars of investment for rehabilitation. This is absolutely essential if Iraq were to realize its huge potential. Of particular need is the upgrading of its infrastructure and the expansion of pipelines and oil-export terminals on the Gulf and also establishing political stability in the country.

The only available oil-export pipeline is the Iraqi-Turkish pipeline (ITP) from Kirkuk to Ceyhan on the Turkish Mediterranean coast with capacity of 1.6 million barrels a day (mbd) but it is currently out of action. Iraq’s oil ministry announced that it is planning to build a new pipeline to replace the ITP.

Iraq should also give priority to extending the Iraq strategic oil pipeline to the Jordanian port of Aqaba on the Red Sea, possibly with similar capacity to the ITP.

And with Iraq’s oil production currently at almost 5 mbd and projected to rise to 6-7 mbd by 2020/21, Iraq needs urgently to expand its export capacity through new export pipelines and terminals on the Gulf beyond the current capacity of 3.8 mbd.